Centre for Cities is an independent, non partisan, research and policy institute committed to improving the performance of UK cities.

March 15, 2013

(Not) spending pennies on the High Street

Seven per cent – that’s how much of the £10 million High
Street Innovation Fund, set up last year to bring empty shops back into use, has been spent to date.

The figures come from a Freedom of Information request by Paul
Turner-Mitchell, an independent retailer, who appears to be on a one-man fact
finding mission on all things High Street policy related - his earlier FOI
revealed that just 12 per cent of the £1.2 million money assigned to Portas
Town Teams had been spent to date. His investigations also reveal how the money
has been spent to date. In Dartford, £1,600 was used to hire a man in Peppa
Pig costume.

Whilst understandable, Mr Turner-Mitchell’s displeasure at
how much of this money has been spent to date, and how it has been used, misses
the point. Regular visitors to this blog will be aware of Centre for Cities’
view on the Portas Review, as detailed here.

In short, a focus on retail alone is far too narrow to solve
the malaise of the High Street. Retailers need sustained footfall. Unfortunately
no end of grant spent on bunting and flower pots is going to deliver this. In
the majority of instances the steadiest source of footfall past the doors of High
Street retailers is likely to be by non-retail workers. But the Portas Review
completely ignores this fact, and so too have a raft of studies published on
the back of it.

The latest to do so is the London Assembly Economic
Committee’s report on empty shops, published
earlier this week. At the launch event, London Assembly Member Andrew
Dismore, Chair of the Economic Committee, remarked that it is the outer lying
High Streets of London that are struggling in particular, and it is these
places that require specific attention from London policymakers to reverse
their retail fortunes.

It’s worth reflecting on this point for a second to show why
something that is well intended is ultimately misguided. A key economic role
played by Outer London Boroughs, as shown in our report Size Matters, is to
‘export’ workers to business-rich central London. This means that the
population of central London swells massively during standard trading hours, as
illustrated in the infographic below (with thanks to Alasdair Rae - see his excellent blog). And so too does the potential
market for retailers – this large in-migration of people every day provides
them with punters to sell their wares to.

It is because of these commuting patterns that retailers
such as Pret thrive in Central London. There are 193 Pret stores in the capital,
the highest of any city in the UK (the next highest is Birmingham, with five).
Where are these Prets located? 80 per cent are in the Inner London Boroughs.
And almost 60 per cent are in Westminster, Islington and the City of London
alone.

London’s core has been strengthening in recent years – more and
more of the capital’s businesses are choosing to locate and is likely to continue to do so as density
becomes ever more important for knowledge based businesses. This, coupled with
the on-going national economic malaise and the rise of internet shopping, means
that for many Outer London High Streets retail is likely to be inappropriate as
a response for reversing their fortunes. Instead policymakers in London should
be thinking about what other uses are suitable for these areas.

What does this mean for cities more generally? Retail
thrives where footfall is concentrated. This means that, particularly in cities
where we have seen a dispersal of economic activity in recent years, any
attempts to revive ailing retail-dominated High Streets should be thinking
about how they can encourage a concentration of economic activity in their city
centres. While not the only required response – tourism, residential and
leisure also have a role to play - only when this has occurred will bunting and
flower pots have any sort of impact.

We should worry less about Portas money not being spent –
its approach means that the money is likely to have little impact
even if it had been used. This could even be a blessing in disguise – at least
it gives the opportunity for it to be recalled and spent on something a little
more sensible. Instead we should be thinking about how to support growth in
underperforming city centres. The Centre for Cities will be investigating this
in more detail in the coming months.